TY - JOUR
T1 - Exchange efficiency with weak ownership rights
AU - Bar-Gill, Oren
AU - Persico, Nicola
PY - 2016
Y1 - 2016
N2 - We show that efficient exchange obtains independently of the degree to which a legal system protects the rights of owners. We study a number of different legal rules, including property rules (strong protection), liability rules (any party can take the owner's asset but must pay a legally determined compensation), and even rules that protect the owner's interests very weakly (liability rules with a very low compensation level). Efficiency is obtained as long as the degree of protection provided by law and by the bargaining protocol is not "too" inversely correlated with a party's valuation of the asset.
AB - We show that efficient exchange obtains independently of the degree to which a legal system protects the rights of owners. We study a number of different legal rules, including property rules (strong protection), liability rules (any party can take the owner's asset but must pay a legally determined compensation), and even rules that protect the owner's interests very weakly (liability rules with a very low compensation level). Efficiency is obtained as long as the degree of protection provided by law and by the bargaining protocol is not "too" inversely correlated with a party's valuation of the asset.
UR - http://www.scopus.com/inward/record.url?scp=84994908604&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=84994908604&partnerID=8YFLogxK
U2 - 10.1257/mic.20140232
DO - 10.1257/mic.20140232
M3 - Article
AN - SCOPUS:84994908604
SN - 1945-7669
VL - 8
SP - 230
EP - 267
JO - American Economic Journal: Microeconomics
JF - American Economic Journal: Microeconomics
IS - 4
ER -